Editorial: How much has the beleaguered EQC misjudged its own legislation?

Last updated 05:00, April 29 2016

STACY SQUIRES/FAIRAX NZ

EQC has again been found wanting, this time after legal action initiated by 98 homeowners. The outcome may affect thousands of properties.

Just when you thought it was almost over, along comes what the EQC Action Group is touting as a "landmark" statement on the Earthquake Commission's repair obligations under its own Act of Parliament.

After filing proceedings in the High Court to clarify the commission's liabilities and interpretation of the EQC Act in November last year, the action group of 98 frustrated homeowners and EQC said yesterday morning they had reached agreement.

The group claims Thursday's declaration will effect thousands of Canterbury householders and their home-repair jobs though EQC insists it is business as usual.

So there remains ambiguity about whether this really will be a game changer for future repair work, whether it might open the way for a major revision of completed substandard and contentious repairs, and whether in fact EQC has been misinterpreting the Act.

On first view, their joint statement seemed to be something of a jaw-dropper, saying that, where it states in the Act the repair work to a claimant's home should return it to "when new" condition, that means just what it says, not that it should merely be repaired back to pre-earthquake standard.

While the action group sees that ruling as critical of EQC for carrying out repairs to pre-quake rather than "when new" condition, the commission says it has not been interpreting it that way at all, that the legal declaration merely confirms its existing practices and will not mean any changes to the way it settles damage claims.

It is hard not to catch a whiff of obfuscation in an attempt to confuse the issue and save face after the initial announcement of the agreement early yesterday. Astoundingly, EQC is clinging to the position that it has always dealt with home repairs on a "when new" basis, despite its making repeated public statements and telling homeowners that its job was to fix damage to a pre-quake level.

Yet in 2014, a document issued by EQC and Fletcher EQR declared their Canterbury Home Repair Programme would return a home to its "pre-earthquake state".

The new joint statement also made it clear that EQC would cover the cost of work to an undamaged part of a house, if that was required to fix quake damage. This contradicts its public statements in 2013 where it told homeowners it would not repair wiring untouched by the earthquakes, even if it needed to be upgraded in order to fix damaged wiring.

Likewise, multiple disputes over repairs to floors has seen the EQC use MBIE guidelines to defend its position not to repair.

Yet EQC's acting chief executive Bryan Dunne denies Thursday's statement was any kind of "landmark settlement". Dunne continues to insist EQC's guiding principles had always met the requirements of the Act. A spokeswoman for the Minister Responsible for EQC, Gerry Brownlee, added that regular customer audits by EQC and insurers showed "generally high levels of satisfaction", with "robust avenues" available to put things right in the event of repair disputes.

We think those statements need to be viewed with more than just a touch of scepticism. EQC's performance has been found wanting on many occasions.

In our view, the ruling has significance. The EQC's catalogue of mismanagement, miscommunication and missed opportunities for redemption continues to grow.